Study hits on city's shortcomings

A new study of the area's economic health found that while Chicago continues to enjoy a diverse base of industries, the city has lost several corporate headquarters recently, and local companies aren't getting an equal share of venture capital investments.

The study was initiated last year by Chicago Metropolis 2020, a group created two years ago by the Commercial Club of Chicago. The findings are based on surveys of economic experts, residents and business owners.

"The study showed a robust economy overall, but also points out warning signs that need to be addressed," said Jim Bray, a consultant who worked on the survey.

For instance, the study found that while the Chicago region is home to 192 companies with 500 employees or more, that number has dropped by 10% since 1997. Companies that have defected recently run the gamut from the high-profile BP Amoco Plc, which moved as a result of its merger, to the smaller firms such as Whitman Corp. which moved after it merged with a Minneapolis company.

Also, the study states, while the amount of venture capital investments has risen sharply since the mid-90s, Chicago is only getting 2% of venture capital dollars nationally.

"At first glance, things look pretty good," said Mr. Bray, noting there was a "gigantic leap" in venture capital funding from 1998 to 1999. "If you look at that, you'd think that everything is coming up roses, but venture capital is going up nationally, and compared to the rest of the nation, we're just puttering along."

On the plus side, Mr. Bray pointed out that Chicago enjoys a wide variety of industries, "which is good because then the economy isn't dependent on any one thing." Chicago-area employees also have a strong median income.

But the strong economic growth of the past decade has also yielded some negative side effects: According to the study, the average motorist spends 44 hours per year in slowed or stopped traffic, compared with 31 hours in 1990.

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